Rating Agencies Increasingly Weighing Environmental Factors in Grading MBS

According to a report in Bloomberg, Moody's Investors Service and S&P Global Ratings have started to more heavily incorporate environmental risks into individual ratings. For example, late last year, both agencies issued reports that coastal cities and states must address climate risks or face potential downgrades. S&P specifically highlighted 18 small islands that were "particularly susceptible to climate change." In recent reviews, S&P found 717 cases from 2015 to 2017 where environmental and climate concerns were a factor in corporate credit ratings, equating to approximately 10 percent of research updates. Those 717 cases represent twice as many cases identified as environmental concerns compared to the previous two years.

wagers
Terms and Conditions | Privacy Policy